InterGlobal Forest LLC v. United States , 2024 CIT 109 ( 2024 )

Slip Op. 24-
UNITED STATES COURT OF INTERNATIONAL TRADE
INTERGLOBAL FOREST LLC,
Plaintiff,
Before: Mark A. Barnett, Chief Judge
v.
Court No. 22-00240
UNITED STATES,
Defendant.
OPINION
[Denying Plaintiff’s application for attorney fees pursuant to the Equal Access to Justice
Act.]
Dated: October 7, 2024
Thomas H. Cadden, Cadden & Fuller LLP, of Irvine, CA for Plaintiff InterGlobal Forest
LLC.
Elizabeth A. Speck, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, for Defendant United States. Also on
the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia
M. McCarthy, Director, and Franklin E. White, Jr., Assistant Director. Of counsel on the
brief was Jennifer Petelle, Attorney, Office of the Chief Counsel, U.S. Customs and
Border Protection, of Washington, DC.
Barnett, Chief Judge: Before the court is an application by Plaintiff InterGlobal
Forest LLC (“IGF” or “Plaintiff”) for attorney fees. Confid. Appl. for Fees and Other
Expenses Pursuant to the Equal Access to Justice Act (“Form 15”), 1 ECF No. 23; see
also Confid. Consol. Pl. [IGF’s] Mot. for Att’y Fees and Expenses Pursuant to the Equal
Access to Justice Act (EAJA) (“IGF Mem.”), ECF No. 20 (accompanying
1 IGF’s application for attorney fees was submitted on the U.S. Court of International
Trade’s Form 15 and is referred to as such herein.
Court No. 22-00240 Page 2
memorandum). 2 Plaintiff seeks an award for expenses and fees allegedly incurred in
defending against U.S. Customs and Border Protection’s (“Customs”) evasion
determination pursuant to the Enforce and Protect Act (“EAPA”), 19 U.S.C. § 1517(2018). For the following reasons, the court denies IGF’s application.
BACKGROUND
Plaintiff seeks an award of attorney fees associated with litigation challenging
Customs’ evasion determination related to the antidumping and countervailing duty
orders on certain hardwood plywood from the People’s Republic of China (“China”).
See Certain Hardwood Plywood Prods. From the People's Republic of China, 83 Fed.
Reg. 504 (Dep’t Commerce Jan. 4, 2018) (am. final determination of sales at less than
fair value, and antidumping duty order); Certain Hardwood Plywood Prods. From the
People’s Republic of China, 83 Fed. Reg. 513 (Dep’t Commerce Jan. 4, 2018)
(countervailing duty order) (together “the Plywood Orders”). The evasion investigation
prompted other agency actions, including a covered merchandise referral to the U.S.
Department of Commerce (“Commerce”), which in turn led to separate challenges at the
court. The court assumes familiarity with the litigation underlying this application and
the related challenges as set out in previous decisions. See Viet. Finewood Co. v.
United States, 47 CIT __, 633 F. Supp. 3d 1243 (2023) (remanding affirmative scope
determination); Far East Am., Inc. v. United States, 47 CIT __, 654 F. Supp. 3d 13082 This filing is titled “motion,” but in substance it is a memorandum in support of the
application. This filing also includes a copy of IGF’s Form 15 that was subsequently
revised in the now-operative version docketed at ECF No. 23.
Court No. 22-00240 Page 3
(2023) (“Far East Scope”) (sustaining negative scope remand redetermination sub nom.
Far East Am., Inc. after the court dismissed Vietnam Finewood Co. as a party to the
litigation); Far East Am., Inc. v. United States, 47 CIT __, 673 F. Supp. 3d 1333 (2023)
(“Far East EAPA I”) (granting the defendant’s motion to remand affirmative evasion
determination); Far East Am., Inc. v. United States, 48 CIT __, 693 F. Supp. 3d 1378(2024) (“Far East EAPA II”) (sustaining negative evasion remand redetermination). The
court recounts the following events relevant to this application for attorney fees.
In 2018, Customs’ Trade Remedy Law Enforcement Directorate (“TRLED”)
initiated an evasion investigation pursuant to EAPA. See Far East I, 673 F. Supp. 3d at
1335–36. The investigation was based upon an allegation that several importers,
including IGF, were evading the Plywood Orders. See id. at 1336. While the
investigation was pending and despite interim measures suspending liquidation of the
entries in question, Customs liquidated the entries subject to the investigation inclusive
of antidumping and countervailing duties. See Far East EAPA II, 693 F. Supp. 3d at
1379–80 (describing liquidation). IGF (and other importers) protested those
liquidations, and Customs suspended the protests. See id.Meanwhile, Customs was unable to determine whether the merchandise at issue
(i.e., that which was shipped from China to Vietnam) was covered merchandise and,
pursuant to 19 U.S.C. § 1517(b)(4)(A), submitted a covered merchandise referral to
Commerce. Far East I, 673 F. Supp. 3d at 1336. Commerce issued an affirmative
scope determination, finding that the merchandise at issue was covered by the scope of
the Plywood Orders. Id. Following that determination, TRLED issued an affirmative
Court No. 22-00240 Page 4
evasion determination. Id. Upon administrative review, Customs’ Office of Regulations
and Rulings (“OR&R”) affirmed that determination. Id.
Three separate lines of cases followed.3 In the litigation underlying this motion,
importers, including IGF, challenged Customs’ evasion determination. Far East EAPA I,
673 F. Supp. 3d 1333. In the second line of cases, importers, including IGF, challenged
Commerce’s scope determination. Far East Scope, 654 F. Supp. 3d 1308. Finally, in
the third line of cases, importers, including IGF, contested the liquidation of the entries
by Customs pursuant to 28 U.S.C. § 1581(i) (2018). See Compl., InterGlobal Forest
LLC v. United States, Consol. Ct. No. 20-00155 (CIT Aug. 14, 2020).
In the challenge to Commerce’s scope determination, the court remanded
Commerce’s affirmative scope determination and, on remand, Commerce reversed its
original determination and found that the merchandise in question shipped from China
to Vietnam was not within the scope of the Plywood Orders. Far East Scope, 654
F. Supp. 3d at 1310. The court sustained Commerce’s remand determination. Id. at
1311. After the scope litigation concluded and after the plaintiffs in the evasion litigation
had filed their motions for judgment on the agency record, the United States voluntarily
requested, and the court granted, a remand for Customs to reconsider its affirmative
finding in light of Commerce’s negative scope determination. Far East EAPA I, 673
3 A fourth case (not involving IGF) sought to rely on the court’s residual jurisdiction to
challenge Customs’ “scope referral to Commerce; Commerce’s alleged delay in acting
on the referral; Customs’ imposition of interim measures; and Customs’ alleged failure
to complete the investigation within the statutory timeframe.” Viet. Finewood Co. v.
United States, 44 CIT __, __, 466 F. Supp. 3d 1273, 1280 (2020). The court dismissed
that case for lack of jurisdiction. Id. at 1287.
Court No. 22-00240 Page 5
F. Supp. 3d at 1339. On remand, Customs reached a negative evasion determination,
and the court sustained that determination. Far East EAPA II, 693 F. Supp. 3d at 1380–
81. Separately, relevant to the litigation challenging Customs’ liquidation of the entries
subject to the evasion proceeding, Customs granted the suspended protests, and some
plaintiffs dismissed their cases. See, Order, InterGlobal Forest LLC v. United States,
Consol. Ct. No. 20-00155 (CIT Aug. 26, 2024), ECF No. 37. The court dismissed IGF’s
case as moot after IGF’s protests were granted, the bills for antidumping and
countervailing duties were canceled, and IGF failed to respond to the court’s notice
affording IGF the opportunity to provide a legal basis for continuing the suit. See id.;
Order, InterGlobal Forest LLC v. United States, Consol. Ct. No. 20-00155 (CIT Sept. 4,
2024), ECF No. 38.
After the court entered judgment in the evasion litigation, IGF filed this application
for attorney fees. Form 15; see also IGF Mem. Plaintiff also requests the application of
a special factor in determining the award of attorney fees. IGF Mem. at 14; see also 28
U.S.C. § 2412(d)(2)(A). Defendant United States (“the Government” or “Defendant”)
argues that Plaintiff is not entitled to an award of attorney fees because IGF was not the
prevailing party in the litigation and the Government’s position was substantially
justified. Confid. Def.’s Resp. to Pl.’s Appl. For Att’y Fees Under the Equal Access to
Justice Act (“Gov’t Resp.”) at 14–26, ECF No. 28. The Government further argues that
even if IGF is entitled to an award, the requested amount is contrary to law and
otherwise unreasonable. Id. at 26–42.
Court No. 22-00240 Page 6
JURISDICTION
The court has jurisdiction over the underlying case pursuant to section 517(g)(1)
of the Tariff Act of 1930, as amended, 19 U.S.C. § 1517(g)(1), and 28 U.S.C. § 1581(c).
After issuing a judgment, the court retains jurisdiction to adjudicate a party’s timely
application for fees and expenses. 28 U.S.C. § 2412(d). 4
DISCUSSION
Under the Equal Access to Justice Act (“EAJA”), if timely requested, an eligible,
prevailing party in an action against the United States may recover attorney fees if the
government fails to show that its position “was substantially justified.” 28 U.S.C.
§ 2412(d)(1)(A). “[A]ttorney fees shall not be awarded in excess of $125 per hour,”
except under certain circumstances. Id. § 2412(d)(2)(A). The court addresses each
element in turn and concludes that, in this litigation challenging Customs’ evasion
determination, IGF was not the prevailing party and the Government’s position was
substantially justified.
I. Timely Filing
As a threshold matter, IGF has timely filed this application in connection with the
litigation challenging Customs’ evasion determination. The applicant must file an
application within 30 days of the final judgment. 28 U.S.C. § 2412(d)(1)(B); USCIT Rule
54.1(a). The court issued its judgment in this case on April 8, 2024. J. (Apr. 8, 2024),
ECF No. 19. The judgment became final on June 7, 2024, after the deadline for appeal
4 Changes made in 2019 to this section of the statute are not material to this decision.
Court No. 22-00240 Page 7
expired without appeal. See USCIT Rule 54.1(a) (referencing 28 U.S.C.
§ 2412(d)(2)(G)). This application was timely filed on July 8, 2024. See 28 U.S.C.
§ 2412(d)(1)(B); USCIT Rule 54.1(a); USCIT Rule 6(a)(1)(C) (providing for timely filing
on a non-holiday Monday when the deadline ends on a Sunday).
II. Eligible Party
IGF is an eligible “party” within the meaning of EAJA. With certain exceptions not
relevant here, a “party” for the purpose of this statute includes “any partnership,
corporation, association, unit of local government, or organization, the net worth of
which did not exceed $7,000,000 at the time the civil action was filed, and which had not
more than 500 employees at the time the civil action was filed.” 28 U.S.C.
§ 2412(d)(2)(B). IGF had a net worth of less than $7,000,000 and fewer than 500
employees when the case was filed on August 17, 2022. Confid. Decl. of Kurt Winn in
Supp. of Consol. Pl. [IGF’s] Appl. for Att’y Fees and Expenses Pursuant to the [EAJA]
(July 8, 2024) ¶ 13 & Ex. 1, ECF No. 20-1. The Government does not dispute that IGF
is an eligible party.
III. Prevailing Party
The first contested element is whether IGF is a prevailing party. Whether a party
is a prevailing party is a question of law. Former Emps. of Motorola Ceramic Prods. v.
United States, 336 F.3d 1360, 1363 (Fed. Cir. 2003). A party seeking an EAJA award
bears the burden of proving that it is the prevailing party. Thompson v. Shinseki, 682
F.3d 1377, 1381 (Fed. Cir. 2012). IGF avers that it is the prevailing party because
Customs’ reversal of its affirmative evasion determination was a success for IGF on a
Court No. 22-00240 Page 8
significant issue. IGF Mem. at 5–6. The Government responds that IGF is not the
prevailing party because Customs’ remand request was not based on Customs’ error
and therefore did not “materially alter the legal relationship between the parties.” Gov’t
Resp. at 14.
The “touchstone of the prevailing party inquiry must be the material alteration of
the legal relationship between the parties” and that “change must be marked by ‘judicial
imprimatur.’” CRST Van Expedited, Inc. v. EEOC, 578 U.S. 419, 421–22 (2016) (first
quoting Tex. State Tchrs. Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792–93
(1989), then quoting Buckhannon Bd & Care Home, Inc. v. W. Va. Dep’t of Health Res.,
532 U.S. 598, 605 (2001)). 5 “[E]nforceable judgments on the merits and court-ordered
consent decrees create” this alteration. Buckhannon, 532 U.S. at 604. However,
litigation resulting in “a nonjudicial alteration of actual circumstances” or “the sought-
after destination without . . . any judicial relief” does not confer prevailing party status.
Id. at 606 (quotations omitted). 6
5 CRST addresses the “prevailing party” issue for the fee-shifting provision of Title VII of
the Civil Rights Act of 1964. 578 U.S. at 421. Texas State Teachers Ass’n addresses
the “prevailing party” issue for the award of attorney fees pursuant to 42 U.S.C. § 1988.
489 U.S. at 784. Buckhannon addresses the “prevailing party” issue for a request for
attorney fees under the Fair Housing Act Amendments. 532 U.S. at 601. These
decisions nevertheless are applicable in the EAJA context. See, e.g., Winters v. Wilkie,
898 F.3d 1377, 1380–82 (Fed. Cir. 2018) (relying on all three cases in deciding an
EAJA application).
6 By contrast, “a favorable ruling on the merits is not a necessary predicate to find that a
defendant has prevailed.” CRST, 578 U.S. at 421 (emphasis added). But see
Buckhannon, 532 U.S. at 603 (noting a prevailing party must receive “some relief on the
merits”); Tex. State Tchrs. Ass’n, 489 U.S. at 791–92 (1989) (same). The Court’s use
of “defendant” appears significant. The Court explained that “[p]laintiffs and defendants
Court No. 22-00240 Page 9
In the context of administrative agency remands, the U.S. Court of Appeals for
the Federal Circuit (“Federal Circuit”) has emphasized the role of agency error in
determining prevailing-party status. “A remand to an administrative agency for further
proceedings can provide the requisite relief required to confer prevailing-party status”
but “only if the remand is predicated—either explicitly or implicitly—on agency error.”
Robinson v. O’Rourke, 891 F.3d 976, 980–81 (Fed. Cir. 2018) (collecting cases). When
a remand is ordered “without a judicial finding of administrative error or a concession of
error by the agency, the default rule is that the remand is not based on administrative
error for EAJA purposes.” Thompson, 682 F.3d at 1381 (quoting Davis v. Nicholson,
475 F.3d 1360, 1366 (Fed. Cir. 2007)). For example, remands “to consider the effects
of legislation enacted while the case was on appeal” or “for consideration of new
evidence discovered for the first time while the case was on appeal” do not necessarily
involve agency error and therefore generally do not confer prevailing-party status.
Former Emps. of Motorola Ceramic Prods., 336 F.3d at 1366 (citing Vaughn v. Principi,
336 F.3d 1351, 1355 (Fed. Cir. 2003)).
After CRST reaffirmed the importance of the change in the legal relationship of
the parties, the Federal Circuit declined to “reconsider or clarify [its] precedent requiring
administrative error in cases of remand for further agency proceedings.” Robinson, 891
come to court with different objectives.” CRST, 578 U.S. at 431. “A defendant seeks to
prevent [a material alteration in the legal relationship between parties] to the extent it is
in the plaintiff’s favor.” Id. (emphasis added). “The defendant has . . . fulfilled its
primary objective whenever the plaintiff’s challenge is rebuffed, irrespective of the
precise reason for the court’s decision.” Id. Thus, a “defendant may prevail even if the
court’s final judgment rejects the plaintiff’s claim for a nonmerits reason.” Id.
Court No. 22-00240 Page 10
F.3d at 982; see also id. at 982 n.3 (noting its precedent “likely is not inconsistent with
CRST”). In Robinson, the Federal Circuit considered both whether the remand was
based on administrative error and whether the remand materially altered the legal
relationship between parties, concluding that under either standard, the applicant for
attorney fees was not the prevailing party. Id. at 982–86; cf. Winters, 898 F.3d at 1381–
82, 1384 (considering both “whether the remand was predicated either explicitly or
implicitly on agency error” and whether there was “a material alteration in the legal
relationship between parties”). Having reviewed the case law from both the Supreme
Court of the United States and the Federal Circuit, the court does not find inconsistency
in the legal standard for the purpose of IGF’s application.
The court concludes that IGF was not the prevailing party in this challenge to
Customs’ evasion determination because neither court order (the order remanding
Customs’ determination and the judgment sustaining the remand determination) was
based on a judicial finding of error by Customs. This conclusion requires the court to
consider, in the EAJA context, the effect of a Commerce scope determination on a
Customs evasion determination. In this litigation, at no point did the court make a
finding of error on the part of Customs in its evasion determinations. Rather, the court
concluded that a remand was appropriate upon request from Defendant because of a
change in Commerce’s scope determination—a change resulting from separate
litigation challenging a separate determination by a separate agency and from which
Court No. 22-00240 Page 11
IGF did not seek an award of attorney fees. 7 Although Commerce’s scope
determination was relevant to Customs’ evasion determination, the two administrative
determinations, and the separate lines of cases challenging each, are distinct.
“Congress was expressly aware of the possibility of parallel litigation stemming from an
EAPA investigation because the statute . . . recognizes that Commerce determinations
responsive to [Customs] covered merchandise referrals may give rise to separate
litigations pursuant to 19 U.S.C. § 1516a(a)(2).” Royal Brush Mfg., Inc. v. United
States, 47 CIT __, __, 675 F. Supp. 1282, 1293 (2023). Defendant’s request for a
remand to take account of another agency’s redetermination here, like remands based
on changes in legislation or the discovery of new evidence, was based on changes
outside the relevant agency’s control and does not confer prevailing-party status for the
purpose of EAJA. See Former Emps. of Motorola Ceramic Prods., 336 F.3d at 1366.
Put another way, any change in legal relationship occurred between Commerce
and IGF when the court assessed Commerce’s scope determination, found error, and
ordered reconsideration. While Customs ultimately changed its evasion determination
subsequent to and based upon Commerce’s change, the order granting the remand to
Customs did not form the basis for the change, only the opportunity. Customs’ finding
of no evasion in the remand determination did not stem from a court evaluation of that
position in this litigation, but rather distinct litigation involving a separate administrative
7 Because IGF did not file an EAJA application in the scope litigation and because the
evasion litigation and scope litigation are separate, the court does not consider whether
IGF would have qualified as a prevailing party in the scope litigation.
Court No. 22-00240 Page 12
agency. Without an opinion that Customs’ evasion determination lacked merit in this
litigation, Customs’ change in position lacks the necessary judicial imprimatur for IGF to
qualify as a prevailing party. 8 A contrary outcome would mean that any time Customs
reverses an evasion determination based solely on Commerce’s reversal of any
covered merchandise determination and without any judicial consideration of the merits
relative to Customs’ findings, a plaintiff could be considered to be the prevailing party
and would potentially be entitled to attorney fees and costs from Customs. See 28
U.S.C. § 2412(d)(4) (explaining that the agency involved in the litigation is responsible
for any award of fees and other expenses). As discussed further below in the context of
substantial justification, such an outcome would be contrary to the purpose of fee
shifting pursuant to the EAJA, which holds agencies accountable for their own litigation
decisions. Accordingly, the court concludes that, in this litigation, IGF was not the
prevailing party for the purpose of an EAJA award.
IV. Substantial Justification
The second contested element is whether the Government’s position was
substantially justified. Regardless of whether IGF is the prevailing party, an award of
attorney fees is not warranted because the Government’s position was substantially
justified. Whether the government’s position is substantially justified is a matter of
8 This case is distinct from Robinson and Winters in which the attorney fees were
sought based solely on a remand (not an additional judgment after remand, as followed
here). In both those cases, unlike this case, the Veterans Court did not retain
jurisdiction. Robinson, 891 F.3d at 978; Winters, 898 F.3d at 1379. Nonetheless, the
court concludes that the court’s remand did not provide the judicial imprimatur to qualify
IGF as the prevailing party.
Court No. 22-00240 Page 13
judicial discretion. Pierce v. Underwood, 487 U.S. 552, 558–59 (1988). While a plaintiff
must allege that the government’s position was not substantially justified, the
government bears the burden of showing that its position was substantially justified.
Scarborough v. Principi, 541 U.S. 401, 414–15 (2004).
IGF alleges that the Government cannot establish that its position was
substantially justified because the Government failed to offer “substantial credible
evidence” in support of its determination. IGF Mem. at 8. IGF further points to
“governmental bad acts,” id. at 10, to establish that the Government’s position was not
substantially justified, id. at 10–12. IGF avers that: TRLED relied on weak evidence to
initiate the investigation; TRLED failed to provide constitutional notice for the
investigation; Customs liquidated entries despite a pending scope referral; TRLED failed
to distinguish between products that did or did not incorporate two-ply wood as an input;
TRLED issued multiple rounds of requests for information; Customs failed to issue its
determination by September 16, 2019, and instead submitted a covered merchandise
referral; Commerce “unreasonably and unjustifiably found” the merchandise was not
substantially transformed as part of the covered merchandise referral; TRLED issued an
affirmative evasion determination against IGF; and OR&R affirmed the evasion
determination. Id.
The Government responds that its position was substantially justified. Gov’t
Resp. at 17–26. First, the Government argues that Customs’ initial finding of evasion
was reasonable based on Commerce’s affirmative scope determination in the referral
from Customs. Id. at 18. The Government further contends that the lack of precedent
Court No. 22-00240 Page 14
and the novelty of EAPA litigation substantially justify the Government’s positions in the
EAPA litigation. Id. at 21–23. Finally, the Government argues that IGF’s recitation of
“bad acts” is meritless because no authority establishes that any purported bad acts
entitle a party to an award of attorney fees. Id. at 23–25. 9
A position is substantially justified if it is “justified to a degree that could satisfy a
reasonable person.” Pierce, 487 U.S. at 565. That the agency’s position was incorrect
is not sufficient to establish that their position was not substantially justified. Patrick v.
Shinseki, 668 F.3d 1325, 1330 (Fed. Cir. 2011) (“The government can establish that its
position was substantially justified if it demonstrates that it adopted a reasonable, albeit
incorrect, interpretation of a particular statute or regulation.”). More specifically, a
conclusion that the agency’s decision was unsupported by substantial evidence does
not establish that the agency’s position was not substantially justified. Luciano Pisoni
Fabbrica Accessori Instrumenti Musicali v. United States, 837 F.2d 465, 467 (Fed. Cir.
1988). Rather, in assessing substantial justification, the court considers “the clarity of
the governing law,” whether the law is unsettled, and “whether the legal issue was novel
or difficult.” Norris v. SEC, 695 F.3d 1261, 1265 (Fed. Cir. 2012). The “‘position of the
United States’ means, in addition to the position taken by the United States in the civil
9 In the alternative, the Government argues that the special circumstances of this case
make any attorney fee award unjust. Gov’t Resp. at 25–26 (citing 28 U.S.C.
§ 2412(d)(1)(A)). The Government cites to the novelty of the circumstances of this
case, noting that “there was virtually no precedent” regarding how Customs should
exercise its authority in an evasion case. Id. at 26.
Court No. 22-00240 Page 15
action, the action or failure to act by the agency upon which the civil action is based.”
28 U.S.C. § 2412(d)(2)(D).
The court finds that the Government’s position, which includes both Customs’
evasion determination and the ensuing litigation in support of that determination, was
substantially justified based on the novel nature of EAPA investigations as well as
Customs’ justifiable reliance on an administrative determination made by another
agency. The unfair trade laws often involve related determinations by more than one
agency, whether it be Commerce, the U.S. International Trade Commission, or
Customs. EAPA investigations have added yet another legal remedy which may
depend upon distinct determinations by Customs and Commerce. 19 U.S.C. § 1517(detailing Customs’ role in evasion investigations and Commerce’s role determining
whether merchandise is covered merchandise); see also Sunpreme Inc. v. United
States, 892 F.3d 1186, 1188–89 (Fed. Cir. 2018) (describing generally the different
roles of Customs and Commerce). The Tariff Act, as amended, carves out a role for
Commerce by directing that if Customs receives an allegation of evasion and is unable
to determine whether the merchandise is covered, the agency “shall” refer the matter to
Commerce to determine if the merchandise is covered by the antidumping or
countervailing duty order. 19 U.S.C. § 1517(b)(4)(A). Indeed, the statute further
recognizes that the distinct determinations of the two agencies lead to separate court
challenges. See Royal Brush, 675 F. Supp. 3d at 1293 (citing 19 U.S.C.
§ 1517(b)(4)(D)). Nothing in the statute suggests that Customs was empowered to
ignore or second-guess Commerce’s scope determination. Commerce’s scope
Court No. 22-00240 Page 16
determination was a necessary part of Customs’ evasion determination, evidenced by
the fact that Customs reversed its evasion determination when Commerce reversed its
scope determination. To conclude that Customs’ position on the issue of evasion was
not substantially justified would hold Customs responsible for Commerce’s ultimately
erroneous decision. See 28 U.S.C. § 2412(d)(4) (explaining that the agency involved in
the litigation is responsible for any award of fees and other expenses).
IGF appears to suggest, in some of its proposed “bad acts,” that the lack of
evasion was so obvious that Customs never should have initiated the investigation, let
alone made the covered merchandise referral to Commerce. IGF Mem. at 10–12.
While IGF advances these arguments in an effort to claim that Customs’ position was
not substantially justified, these particular arguments only reinforce the court’s
conclusion that IGF is not the prevailing party because these claims were not fully
briefed to, or adjudicated by, the court. An application for attorney fees is not an
opportunity to litigate those claims now. See Hensley v. Eckerhart, 461 U.S. 424, 437
(1983) (“A request for attorney’s fees should not result in a second major litigation.”).
Other purported “bad acts” IGF identified likewise fail to suggest the
Government’s position lacked substantial justification. 10 Certain of the purported “bad
10 As the Government points out, IGF offers no explanation for how “governmental bad
acts” relate to whether a position is substantially justified. IGF simply avers that these
actions “significantly increased” its attorney fees. IGF Mem. at 10. But whether
attorney fees were affected does not speak to whether a position is reasonable such
that it is also substantially justified. To the extent IGF attempts to use these “bad acts”
as support for its request for a special factor to increase any award of attorney fees, that
argument also is unpersuasive. See Starry Assocs. v. United States, 892 F.3d 1372,
Court No. 22-00240 Page 17
acts” were not performed by Customs, but by Commerce, and are outside the
parameters of this evasion litigation. IGF points to Commerce’s determination that two-
ply panels were covered by the scope, but that Commerce determination was
challenged in a separate litigation in which IGF did not seek attorney fees. Similarly,
IGF points to liquidation instructions and liquidation as “bad acts,” but, again, the
liquidation of entries was the subject of other court action, which was ultimately
dismissed. Each of these alleged “bad acts” were the subject of litigation separate from
this evasion litigation. Still other purported “bad acts” are unpersuasive as evidence of
a lack of substantial justification for Customs’ position. Agency actions such as issuing
requests for information (even if numerous), referring a covered merchandise inquiry to
Commerce, and reviewing the determination de novo may cause a participant to incur
additional costs. Such additional costs, however, do not establish a lack of substantial
justification because they do not speak to the reasonableness of the position taken by
the agency. See Pierce, 487 U.S. at 565 (describing the standard).
1377 (Fed. Cir. 2018) (“[E]gregious agency misconduct is not a ‘special factor’ under
[section] 2412(d)(2)(A).”).
Court No. 22-00240 Page 18
CONCLUSION
For the reasons stated above, the court DENIES IGF’s application for attorney
fees. 11
/s/ Mark A. Barnett
Mark A. Barnett, Chief Judge
Dated: October 7, 2024
New York, New York
11 Because the court denies IGF’s application, it need not consider arguments about the
application of a special factor to determine the amount of the award or the
reasonableness of the award sought.